FTX Sells European Division for $32.7 Million Amid Bankruptcy

FTX, the bankrupt crypto exchange, has reached a resolution in the dispute over its European division, culminating in the sale of FTX Europe back to its original founders.

by Faruk Imamovic
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FTX Sells European Division for $32.7 Million Amid Bankruptcy
© Getty Images/Leon Neal

FTX, the bankrupt crypto exchange, has reached a resolution in the dispute over its European division, culminating in the sale of FTX Europe back to its original founders. This move marks a pivotal moment in FTX's ongoing efforts to navigate its bankruptcy proceedings and recover funds for its creditors.

A Return to Origins for FTX Europe

FTX Europe, initially acquired by Sam Bankman-Fried's FTX in 2021 for $323 million, will be sold for $32.7 million to its founders, Patrick Gruhn and Robin Matzke. This transaction represents a drastic reduction from its acquisition price, highlighting the challenges FTX has faced in finding suitable buyers amidst its financial turmoil.

The sale agreement, reported by Reuters on February 24, suggests that FTX's attempts to divest its European arm were driven by a lack of alternative purchasing parties, rather than a strategic decision to downsize or refocus its operations.

Prior to this agreement, FTX had sought to recoup the funds expended on acquiring the Swiss startup Digital Assets AG, later rebranded as FTX Europe. The company lodged a lawsuit alleging misuse of customer funds to finance the acquisition and claimed the purchase price constituted a "massive overpayment." This legal battle saw the startup's founders vehemently denying the allegations and launching a counterclaim demanding $256.6 million from FTX.

Strategic Divestment Amidst Bankruptcy

The resolution of this dispute on February 21 and the subsequent sale of FTX Europe is part of a broader strategy by FTX to liquidate assets and repay creditors following its Chapter 11 bankruptcy filing in the United States in November 2022.

The bankruptcy proceedings have seen various crypto exchanges expressing interest in acquiring FTX’s regional operations, aiming to capitalize on the opportunity to expand their market share. Notably, American crypto exchange Coinbase made attempts to acquire FTX Europe, alongside interest from other industry players such as Trek Labs and Crypto.com.

FTX Europe's brief operational period in the region, lasting only eight months, ended with the launch of a website in March 2023 for European customers to request withdrawals—a significant step towards providing liquidity to affected users.

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